Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155575
Authors: 
Faria, João Ricardo
Silva, Emilson C.D.
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6333
Abstract: 
In a family context with endogenous timing, multiple public goods and alternative parental instruments, we show that the optimal timing for the sequential-action game played by rotten kids and a parent depends crucially on whether the kids are homogeneous or heterogeneous. For homogeneous kids, the rotten kid theorem holds irrespective of the parental policy instrument, implying that it is optimal to let the kids to be action leaders. If the kids are heterogeneous, however, parental leadership yields a first best outcome and, hence, it is optimal whenever the kids are economically dependent and agree on the tradeoff between public goods.
Subjects: 
rotten kids
public goods
endogenous timing
heterogeneous preferences
economically dependent
JEL: 
D13
D61
D64
D78
H41
Document Type: 
Working Paper

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